Department of Energy and Climate Change's settlement at the Spending Review 2015

The Chancellor has published the results of the spending review, including details of the Department of Energy and Climate Change budget over the course of this parliament.

The Spending Review and Autumn Statement delivers on the government’s priority to provide security to working people at every stage of their lives. It sets out a 4 year plan to fix the public finances, return the country to surplus and run a healthy economy that starts to pay down the debt. By ensuring Britain’s long term economic security, the government is able to spend £4 trillion on its priorities over the next 4 years.

For the Department of Energy and Climate Change this means:

doubling DECC’s innovation programme to £500 million over 5 years, which will strengthen the future security of supply, reduce the costs of decarbonisation and boost industrial and research capabilities

funding for an ambitious nuclear research programme that will revive the UK’s nuclear expertise

a £2 billion share of the government’s £5.8 billion International Climate Fund, which will help the poorest and most vulnerable countries decarbonise and adapt to the effects of climate change

resource savings of 22% by 2019-20 delivered through efficiencies in corporate services and reducing the cost of contracts

Department of Energy and Climate Change

£ billion

Baseline

Plans

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21 (2)

Resource DEL (1)

0.9

0.9

1.0

1.0

0.9

*

Capital DEL

2.3

2.4

2.5

2.4

2.3

2.8

Total DEL

3.3

3.3

3.4

3.3

3.2

*

(1) In this table, Resource DEL excludes depreciation.

(2) 2020-21 Resource DEL departmental budgets have only been set for some departments. For the rest, these budgets will be set in full at the next Spending Review.

Security

The government will provide over £11 billion for the Nuclear Decommissioning Authority (NDA) to continue its vital work cleaning up historic nuclear sites. This includes making significant progress on the legacy ponds and silos at Sellafield, some of the most hazardous facilities in the UK.

Long term investment

The government’s doubling of investment in DECC’s innovation programme will help position the UK as an international leader in small modular nuclear reactors, and deliver commitments on seed funding for promising new renewable energy technologies and smart grids.

The government will provide £295 million over 5 years to improve the energy efficiency of schools, hospitals and other public sector buildings. Separately, over £300 million of funding for up to 200 heat networks will generate enough heat to support the equivalent of over 400,000 homes and leverage up to £2 billion of private capital investment.

Efficiency and Reform

The government will increase funding for the Renewable Heat Incentive to £1.15 billion in 2021 to ensure that the UK continues to make progress towards its climate goals while reforming the scheme to improve value for money, delivering savings of almost £700 million by 2020-21.

Between 2016-17 and 2019-20 the government will save over £1 billion by making
efficiencies and savings in the NDA through; better value contracts; top class commercial procurement; delaying non-safety-critical projects; and cancelling a project that is no longer needed due to a world-first breakthrough in nuclear decommissioning research.

DECC will deliver £220 million of resource savings by 2019-20 through efficiencies from pooling back office and corporate services and reducing the costs of contracts to manage the country’s historic coal and nuclear liabilities.

Secretary of State for the Department of Energy and Climate Change, Amber Rudd, said:

“My priority is to deliver secure, affordable, clean energy supplies that hardworking families and businesses across the country can rely on, now and in the future. As we transition to a low-carbon economy as cost effectively as possible, finding new sources of energy that are cheap, reliable and clean is essential, which is why we are boosting our spending on innovation and backing the industries of the future.

“We will continue taking action to keep consumer bills down. We will also double our spending on renewable heat and electricity over the next five years as we invest in new infrastructure fit for the 21st century to ensure our long-term energy security.”